XTRA

The company runs an arrangement where you give up part of your salary in return for National Insurance (NI) savings. This arrangement is called 'XTRA'. Although the same amount of money will go into the scheme on your behalf, it will all be paid by the company. As a result, both you and the company pay less National Insurance.

You are automatically included in XTRA unless you opted out before 1 December 2008 (or prior to joining the scheme if you joined the company before 1 January 2009), or if you would be losing State benefits by participating.

This is how XTRA works.

• You do not pay normal contributions into the scheme. Instead, the company pays an amount directly into the scheme for you equal to 4% or 6% of your pensionable pay.
• The company then adjusts your salary by an amount equal to this.
• You pay less National Insurance, so your take-home pay will be higher than it would be otherwise.

Five reasons why XTRA is good for you.

1. You pay less National Insurance so your take-home pay goes up.
2. The amount of income tax you pay is not affected.
3. Your pay reviews and bonuses (if any) are not affected.
4. Your benefits are based on your salary before any adjustment for XTRA.
5. Any tax credits you may receive from the State won’t be reduced.

If you leave the scheme after three months but before two years of membership, you will be able to transfer the cash value of your benefits to another pension arrangement, within three months of leaving.

If you choose not to transfer or have been a member of the scheme for less than three months, you will have no benefits left in the scheme. This is because the company paid into the scheme on your behalf through XTRA, so there are no contributions to be refunded to you. By law, you are only entitled to hold benefits within the scheme if you have been a member for two years or more.